Published On: Thu, Mar 16th, 2017

NZD/USD: the pair is in downward trend again


Current trend

During first two trading weeks of March, NZD was decreasing against USD, as investors become interested in US dollar due to strong macroeconomic releases. Starting from the 1st of May, the pair lost more than 300 points and almost reached last year December’s local minimum — 0.6865. The main reason for this is positive data from USA on labor market, key indices and inflation. US dollar was also supported by Janet Yellen, who described positive prospects for USA economy in mid-term perspective. New Zealand RBA put pressure on national currency, leaving the interest rate unchanged. At the end of previous week, the pair was consolidating sideways, and during FOMC’s decision on interest rate followed by the press conference it started growing rapidly. Despite another interest rate hike, US dollar weakened as Janet Yellen commented on ceasing US economy stimulation. Today, the pair went down again, influenced by negative releases on New Zealand GDP. At the end of week, attention must be paid to the data from USA on industrial input, labor market and construction sector. New Zealand will respond with Richmond Fed Manufacturing Index.

Support and resistance

Most probably, we see the pair returning to downward channel and consolidating within it. Negative stats from New Zealand have led to significant currency weakening. US dollar decreasing during last two weeks can be another factor. Technical indicators support the forecast. MACD volume is still high, and lower border of Bollinger Bands consolidated at 0.6820.

Support levels: 0.6970, 0.6950, 0.6890, 0.6865, 0.6820, 0.6770, 0.6710.

Resistance levels: 0.7010, 0.7050, 0.7135, 0.7160, 0.7200, 0.7245, 0.7300, 0.7370.

Trading tips

In this situation, short positions can be opened at the current level with targets at 0.6865, 0.6820. Stop Loss order can be placed at 0.7040. 

Forex Analysis

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